Saturday, April 19, 2003

American Airlines dumps executive bonuses

By David Koenig
The Associated Press

DALLAS - After sharp criticism from angry employees, the head of American Airlines apologized Friday as the company dropped a plan to give bonuses to six top executives if they stay on until 2005.

But American will keep a supplemental pension program for a broader group of executives that will be protected even if the world's largest airline files for bankruptcy.

The bonuses and pension plan caused an uproar among employees. They learned of the perks this week only after deciding to cut their own benefits by $10 billion over six years - cuts the company said it needed to stay afloat.

"I have apologized to our union leaders for this and for the concern it has caused our employees," said chairman and CEO Donald J. Carty.

Leaders of the airline's three biggest unions warned they might try to have the concessions thrown out because American didn't tell them about the perks until workers agreed to cuts of 15.6 percent to 23 percent. The perks were disclosed in a Securities and Exchange Commission filing Tuesday.

The bonuses, equal to twice their salary, were offered to Carty and five other senior executives. Under the plan, Carty would have received a $1.6 million bonus.

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